August 14, 2022
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American Riviera Bank reports income drop due to end of PPP program

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Santa Barbara-based American Riviera Bank reported July 21 that its net income in the first half of 2022 shrank to $5.7 million, compared with $6.1 million in the same period a year earlier.

For the second quarter, which ended June 30, American Riviera reported unaudited net income of $2.5 million, or 49 cents per share, down from $3.6 million, or 70 cents per share, in the same quarter a year before.

The bank attributed the year-over-year decline due to higher amounts of non-recurring U.S. Small Business Administration Paycheck Protection Program loan fee income in 2021. The PPP fee income recognized was $1.2 million lower in the six months ended June 30 than in the same period in 2021, according to American Riviera. The PPP program concluded on May 31, 2021.

The bank has generated loan growth, deploying liquidity into “core loans,” which exclude PPP loans.

The bank saw its total deposits increase 19%, or $203.7 million, from June 30, 2021 to June 30, 2022. Core loans grew 22%, or $153.2 million.

“PPP loan forgiveness has been efficiently handled for our small business clients, and only $6.2 million of these 1% interest rate loans remained outstanding at June 30, 2022,” the bank said in its earnings release.

The $900,000 addition to allowance for loan and lease loss in 2022 was necessary based on the reported core loan growth, the bank said.

“The bank continues to respond to the needs of our community by deploying the deposits that our clients have entrusted us with into loans right here on the Central Coast,” American Riviera CEO Jeff DeVine said in the bank’s news release. “This is the value proposition of the community banking model.”